With sugary soft drinks under assault, industry scrambles to broaden its beverage offerings

Industry efforts

Pepsi: This year, the firm introduced Pepsi Next, which has about half the calories of regular sodas (60 calories, versus 140).

Dr Pepper Snapple Group: Last year, it rolled out its 10-calorie “Dr Pepper Ten” and is testing the formula with Sunkist and Canada Dry.

Coca-Cola: It will start testing its mid-calorie versions of its Fanta and Sprite in select cities in the coming weeks.

No super-sizing in New York

New York Mayor Michael Bloomberg has proposed a ban on the sale of large sodas and other sugary drinks in restaurants, delis and movie theaters in the hopes of combating obesity. Drinks would be limited to 16 ounces. The ban would apply only to drinks that contain more than 25 calories per 8 ounces.

Cold, bubbly, sweet soda, long the American Champagne, is becoming product non grata in more places than ever these days.

Schools are removing sodas and other sugary soft drinks from vending machines at a faster pace, and local governments are stepping up efforts to take them out of public facilities as the nation’s concerns about obesity and its costs grow.

The latest salvo is from New York City Mayor Michael Bloomberg, who proposed last week that the city prohibit restaurants, delis and movie theaters from serving large cups of sodas and other sugary drinks. The ban on serving more than 16 fluid ounces a cup, which would be the first of its kind in the nation, comes at a time when soda consumption has been declining.

The industry has struggled in recent years as more health-conscious Americans have shifted away from sugary sodas toward bottled water and sports drinks like Gatorade. That’s led to a 20 percent reduction in the calories consumed per capita through carbonated beverages over the last decade, according to the industry tracker Beverage Digest.

Last year, the average American drank slightly under two sodas a day — or 714 eight-ounce servings per year — a drop in per capita consumption of about 16 percent since the peak in 1998, according to the trade publication. Meanwhile, bottled noncarbonated beverage sales, which include juice drinks, teas, sports drinks and bottled waters, jumped 0.8 percent in 2011.

Relying on ‘flat’ drinks

What began as a slow decline accelerated in the middle of the last decade and now threatens some of the best-known brands in the business. Coke and Pepsi are relying more than ever on the “flat” drinks and bottled waters in their portfolios and on increases in the price of sodas, forcing die-hard drinkers to pay more to feed their sugar habits.

“The question is: Are we seeing a modest, multiyear decline that will bottom out? Or are we seeing the beginning of a paradigm shift away from carbonated soft drinks?” said John Sicher, publisher of Beverage Digest and a longtime observer of the industry. “I don’t think anyone knows yet, but I think there are continuing headwinds against the category that aren’t abating.”